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Weekly Review: Difficult to determine the conduct of the cotton market – Markets

KARACHI: Due to the extraordinary fluctuations in the market, it is difficult to determine the direction of the market. Adopt the policy of following the market trend. After the fluctuation, the downtrend prevails in the market. The financial crisis is intensifying in the market. From now on, the All Pakistan Textile Mills Association will grow cotton. Textile policy postponed for the fifth time.

The Multan Central Cotton Research Institute conducted an experiment to increase agricultural production through artificial rains. In the local cotton market over the past week, due to cautious purchases by spinning mills and spinning mills, the downtrend prevails in the market after the fluctuation.

Under the influence of New York Cotton’s Rate of Promise (Waday Ka Bhao), it was difficult to determine the direction of the market. The ginners and textile factories had adopted the policy of following the trend of the market.

During the last week, the quality of cotton has been affected by the rains in the cotton growing areas. Good quality cotton was available in lesser quantities. Due to the high cotton rates compared to last year’s financial crisis, the market is growing. The partial arrivals of cotton shipments imported by the textile mills have already started and they are paying the costs.

On the other hand, many textile factories had sold yarn on the basis of the loan and they were facing payment difficulties due to which they were in financial crisis. However, the textile factories are in better condition than last year; therefore, they bear the financial crisis to some extent. However, factories that are not financially sound buy cotton at the available rate due to which market stability has been observed to some extent, but the overall rate has been determined with the promise rate (Waday Ka Bhao) of New York Cotton.

A week before a fluctuation of 5 to 6 US cents was observed in the promise rate (Waday Ka Bhao) of New York Cotton under the influence of which fluctuations of Rs 500 to Rs 600 were observed on the local cotton market while the cotton rate reached at the highest level of Rs 15,000 per maund and the rate of Baloch cotton reached at the highest level of Rs 15,500 per maund.

Overall, however, a downtrend was observed in the New York cotton rate due to which the New York cotton rate was between 103 and 116 pounds. According to the Monthly Report of World Agricultural Demand and Supply Estimates (WASDE) in which the cotton production estimates were given, due to the increase in cotton production in the world, the production of cotton in Pakistan has also increased from last year’s output. The cotton rate has fallen in China due to the energy crisis. According to expectations, cotton production has declined in India and Pakistan.

According to experts, the increase in cotton production in the world and its demand is creating a negative impact on New York’s cotton rate. While the decrease in cotton production in India and America can have a positive impact on the market.

Due to a 30 percent increase in cotton production over last year, world cotton production saw an overall increase of 6 Lac ninety thousand bales. While due to the energy crisis in China, the demand for cotton has decreased by more than 7 Lac bales. The opening and closing stocks of cotton in the world are 10 Lac bales and 4 Lac fifty thousand bales, respectively.

The cotton rate in Sindh after fluctuation was between Rs 12,000 and Rs 14,500 per maund. The rate of Phutti was between Rs 4000 and Rs 6100 for 40 kg. Banola’s rate was between Rs 1350 and Rs 1900 per maund.

The cotton rate in Punjab was between Rs 14,000 and Rs 15,000 per maund. The rate of Phutti was between Rs 5500 and Rs 6400 for 40 kg. Banola’s rate was Rs 1600 to Rs 2000 per maund.

The cotton rate in Balochistan was between Rs 13,600 and Rs 14,500 per maund. The rate of Phutti was between Rs 5,900 and Rs 7,000 for 40 kg. Banola’s rate was between Rs 1600 and Rs 2000 per maund.

The Karachi Cotton Association’s spot rate committee lowered the spot rate by Rs300 and closed it at Rs 14,300 per maund.

Karachi Cotton Brokers Forum Chairman Naseem Usman said that overall, a downtrend was observed in international cotton markets. The New York cotton promise rate (Waday Ka Bhao) after fluctuation has remained low.

The New York cotton rate on Thursday after rising three cents US closed at 107.10. As of the morning of Friday, the New York cotton rate began to rise privately and until the evening, after rising by 4 US cents, it broke through the 111 US cent level, but in the evening, after the USDA export report, which showed a 53% drop in sales, the rate of New York cotton which had increased by 4 US cents since the morning, fell again by 4 US cents to 107 American cents.

In this way, a fluctuation of 8 cents US was observed in one day in the New York cotton promise rate (Waday Ka Bhao).

In recent weeks, China was the biggest importer according to the USDA report, but due to the festival holiday in China from October 1-7, it was not involved in the purchases.

However, the textile factories are interested in purchasing local cotton. In addition, the upward trend continued in the price of cotton in India, Brazil, Central Asia, Africa and China.

The WASDE report also hinted that cotton production could decline in India, America and China, while in Pakistan cotton production could increase by 30 percent.

The Cabinet’s Economic Coordination Committee (ECC) under the chairmanship of Finance Minister Shaukat Tarin failed to muster support for the long-awaited 2020-25 Textile and Clothing Policy Project and it formed a sub -committee to resolve issues before its next meeting.

It is relevant to mention here that the announcement of the textile policy is postponed for the fifth time in less than a year.

However, the Central Cotton Research Institute (CCRI) Multan has demonstrated for the first time artificial rain technology to study its impact on different varieties of cotton. According to the CCRI spokesperson, scientists at CCRI Multan demonstrated the technology in the presence of the director of the research organization, Dr Zahid Mahmood, and it would help researchers see which varieties are most affected by rain and those that are the least damaged.

Artificial rain fell on an acre of experimental cotton fields at CCRI Multan where different varieties were being monitored. This would help scientists assess the impact of rain on seed germination, fiber quality, blackness, color, fungus in bolls, weeds and pest infestations on each cotton variety, said the spokesperson. The capacity would help experts prepare guidelines for cotton producers in areas that experience more rainfall to enable them to minimize rain-related crop damage.

The spokesperson said that the CIRB is continuing its research to enable farmers to be smart enough to negotiate the phenomenon of climate change and achieve good production results.

Pakistan Textile Mills Association (APTMA) chief boss Gohar Ejaz announced that the textile industry will invest $ 5 billion by adding 100 new textile factories which will create 500,000 new jobs and increase exports of textiles.

He also said that due to the favorable atmosphere for farmers, cotton production is expected to increase by 50 percent from last year. Nine million bales are expected to be produced in the country this year. Last year, Rs 200 billion were disbursed among farmers as payment for their harvest. This year, Rs 600 billion is expected to be paid to farmers as the price of their harvest, which is Rs 400 billion higher than last year.

He also said that we will achieve better results after 2010. The APTMA Cotton Foundation made a decision regarding the promotion of model agriculture. Sources have claimed that APTMA has taken 600 acres of land to develop a model farm. In addition, APTMA had signed a memorandum of understanding for the cultivation of cotton on 30,000 acres of land in Tajikistan.

Copyright Business Recorder, 2021


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